Will the China-US trade war continue?

The White House still seems to be talking tough on China, but few people know how Joe Biden will handle the world’s second-biggest economy.

Worker in a Vietnamese factory
Vietnam struggles to match China’s sophisticated manufacturing infrastructure
(Image credit: © Linh Pham/Getty Images)

“Strategic competition with China is a defining feature of the 21st century.” White House press secretary Jen Psaki is talking tough on China, says Edward Alden for Foreign Policy. Yet there are still “frustratingly few details” about how President Biden will handle trade with the world’s second-biggest economy. He has even dodged the question of whether he plans to scrap Donald Trump’s tariffs of up to 25% on most Chinese imports.

Investors are quite happy for trade with China to remain low down the to-do list, says Craig Mellow in Barron’s. The iShares MSCI China ETF has gained 10% already this year on hopes that Biden will provide less storm and stress than his predecessor. But “conflict delayed is not conflict resolved”. Investors have “priced in Biden being less aggressive, but we’re confident it will go sour at some point”, says Matthew Gertken at BCA Research.

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